๐๐ญ๐จ๐๐ค ๐๐ง๐๐ฅ๐ฒ๐ฌ๐ข๐ฌ: ๐๐ก๐ฒ ๐ง๐๐๐ง๐ญ'๐ฌ ๐๐๐ฅ๐๐ง๐๐ ๐๐ก๐๐๐ญ ๐๐จ๐ฎ๐ฅ๐ ๐๐ ๐๐๐๐๐ข๐ฏ๐ข๐ง๐
Dear Investors,
The end of the year is approaching, and as every year, I'm looking for potential candidates for our portfolio in the coming year.
When we rebalance our portfolio in January 2026, I will adjust the composition of positions based on my risk assessment, and in some cases, remove them. New companies will then be added to the portfolio, so that we ultimately hold between 20 and 25 company shares, as usual.
I'm not looking for the obvious ones that every screener or newsletter displays. I'm looking for hidden growth opportunities. $NVT (nVent Electric plc) is currently - along with other stocks - relatively high on my watchlist, and I'd like to explain why.
Those who only look superficially at the numbers see stagnation and red indicators. Those who look a little deeper into the structure of the figures might see more.
Here is my analysis:
I believe what we are seeing at nVent is not stagnation, but transformation. At first glance, revenue has appeared flat for months. One might think growth is over. I disagree.
The old core business, namely control cabinets for traditional industry, has recently suffered worldwide from the recession in the manufacturing sector. This is dragging down the balance sheet figures.
At the same time, the Data Solutions (Liquid Cooling) division has grown strongly with a CAGR of 20-35% over the last five years. A CAGR of up to 30-40% is predicted for this year and the years up to 2030. This year, the data center division already accounts for about a quarter of the company's revenue.
This growth in the data center sector is currently masked by the weakness of the former core business. But I believe that we are at a turning point. The data center division is becoming so dominant that it will most likely take the lead in the next few years.
The fact that net income or cash flow recently looked negative is deterring many investors. But it's important to understand what the money was spent on. nVent isn't burning cash in its operations; it's investing aggressively. Management has used hundreds of millions of dollars to acquire technology leaders like ECM Industries, Texa Industries and Trachte. This pushes the balance sheet into the red in the short term, but secures the technology and surrounding infrastructure for AI cooling in the long run. Through these expensive acquisitions, nVent has bought itself a technological moat that few competitors can catch up to. Because they can now supply everything from a single source: the building (Trachte), the server cabinet (Schroff), the power distribution (ECM) and the liquid cooling (nVent Cooling).
At the same time, the market still values โโthe stock partly like a boring industrial stock with a P/E ratio of 29 โ compared to competitor $VRT (Vertiv Holdings Co), which trades at a P/E ratio of 65 โ even though it already contains a highly profitable tech supplier. Such valuations are precisely the opportunities we should be keeping an eye on.
Have a great weekend,
Bjรถrn
$XYL (Xylem Inc)$GER40$NSDQ100... Show More
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Wed Mar 11 2026 04:13:57 GMT+0000 (Coordinated Universal Time)
